Summary:
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ISM non-manufacturing PMI 58.5 vs 56.8 exp. 55.7 Prior
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Employment 56.7 vs 56.1 prior - highest since January
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US100 retests the breakout level around 7480
The most recent ISM release has delivered a similarly upbeat assessment of the service sector as it did for the manufacturing equivalent just a couple days ago with another strong beat. The ISM non-manufacturing PMI for August rose to 58.5 from 55.7 previously, with the jump bigger than the expected increase to 56.8.
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A combination of both the non-manufacturing and manufacturing ISMs for August rose to 119.8 which is the second highest since 2004. This indicates that the US economy is performing strongly. Source: Bloomberg.
Within the report there are several other points of interest with the employment component of particular interest given the earlier miss in ADP, with the knowledge that tomorrow sees the NFP release. This measure rose to its highest since January after rising to 56.7 from 56.1 previously. In addition, prices paid fell from 63.4 to 62.8 while the new orders rose to 60.4 from 57.0.
Despite what is clearly more strong data from the US, indices across the pond are coming under pressure with the US100 the biggest loser at the time of writing. The market experienced a large decline on Wednesday and today it has fallen lower, in doing so moving beneath the prior breakout level of 7484. A daily close below 7484 could be seen to mark this latest break as false. Furthermore the market has now dipped below the 21 EMA for the first time in quite some time and it is apparent that previous pullbacks to this indicator have represented buying opportunities in the past 5-6 months.
The US100 has pulled back below its 21 EMA after breaking beneath the prior breakout level of 7484. Dips below this indicator have provided buying opportunities during the 5-6 month uptrend but should price fall much further then it could be seen to mark the end of this impulse. Source: xStation
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